MDS 3.0 Documentation And RUG-IV

Accuracy under new RUGs leads to better care, appropriate payment.

February 2011

Steve Herron and David Rokes, RN

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The minimum data set (MDS) 3.0 and the new skilled nursing facility payment system resource utilization group IV (RUG-IV) ushered in a new era of change for providers of long term and post-acute care. For many facilities, the implementation of these new systems had been preceded by months and months of planning and analysis.

For others, the planning was cut short and limited due to available resources. In either case, now is the time for every provider to circle back and assess the internal processes that were put in place to manage under these new systems. This post-implementation step is essential to ensure the accuracy of data captured for optimal resident care, favorable survey results, and appropriate reimbursement.

Focus On ADLs

Under MDS 3.0 and RUG-IV, the categories of Late Loss Activities of Daily Living (ADLs) that affect reimbursement are unchanged. They include bed mobility, transfer, eating, and toilet use. Accurate capture of these ADLs is still essential, as they influence each of the 66 RUG-IV categories, just like they did for the groupings under RUG-III.

What has changed is the methodology for scoring on the ADL index. As a result of this change in methodology, many residents are expected to generate a lower ADL score under RUG-IV as compared with the previous RUGIII reimbursement system.

For example, under RUG-III, the Reduced Physical Functioning category was the only group that broke the ADL index into five different “end-splits” that were reflected as A through E in the score. Under RUG-IV, there are now four such categories with five ADL end-splits. The new additions to end-splits include Special Care High, Special Care Low, and Clinically Complex.

From an operational perspective, this change in methodology introduces 15 new opportunities for a one-point documentation error that could cause a resident to drop into a lower end-split. This means that it is much more likely that a missed ADL designation will cause a facility to be reimbursed at a lower rate than is appropriate.

To illustrate, under RUG-III, missing one ADL end-split meant losing, on average, approximately $20 per day.

In contrast, under RUG-IV that average jumps to more than $34 per day. That’s more than a 50 percent increase in the value of one missed ADL point. Extrapolate that calculation across the entire resident population, and it is easy to see how some facilities could face thousands of dollars in lost reimbursement.

In addition, over time, miscoded assessments could also lead to residents receiving care plans that are inadequate for their needs.

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New ADL End-Splits

In conjunction with adding more ADL end-splits, RUG-IV also increased the number of categories that are unattainable with low ADL scores. The RUG-III ADL index range was four through 18, while the RUG-IV range is zero through 16.

Eight RUG-IV categories will not be attainable with an ADL score of less than two (most notably, the higher nursing categories). For example, under RUG-III, residents who were otherwise qualified for Extensive Services would fall to the Special Care categories if their ADL score was below the threshold.

Under RUG-IV, these same residents, each having the exact same resource demands, will bypass the Special Care categories and fall into the lower reimbursement group of Clinically Complex.

This serves as another and more severe penalty for missing an ADL score. For more information about how to reduce coding errors under RUG-IV, click HERE.

Beyond ADLs

In RUG-IV, 26 RUG groups are affected by depression indicators. This compares with only six RUG groups under RUG-III (Clinically Complex). At the same time, the average value for missing a depression indicator end-split has increased.

More specifically, under RUG-III rates, missing a depression end-split cost, on average, about $15 per day in lost reimbursement. Under RUG-IV, missing a depression end-split will cost on average more than $45 per day, an increase of more than $30 per day.

Pre-admission documentation is another area that providers should monitor. A key change that stems from MDS 3.0 is the elimination of a look-back period, which means that facilities can no longer “look back” for most services delivered outside of the skilled nursing facility to establish acuity and appropriate reimbursement.

This reinforces the importance of immediately capturing services delivered inside the walls of the facility, especially services such as ADLs and mood and behavior, which have historically been under-coded. Effective processes and accurate coding are essential for success under RUG-IV and MDS 3.0. Accordingly, it is important to provide adequate employee education, coupled with incentives and opportunities for employees to demonstrate their coding comprehension.

Leverage Technology

It is also important to leverage available technology like electronic documentation systems, which offer a host of benefits, including protection from copied documentation and tools that alert the appropriate staff when documentation is not complete.

Electronic systems offer many benefits that allow facilities to capture more accurate and timely ADL data.

Since the MDS focuses on activities that happen three or more times at a given level over the course of seven days, it is helpful to use an electronic system where information can be added multiple times throughout a shift.

Electronic data capture also gives providers a tool to monitor data on a more timely basis. This ability helps identify significant changes in resident status within the 14-day window as required by the

resident assessment instrument manual.

Ultimately, a rapid detection of any decline in resident status also helps improve overall resident care.

Along with changes in reimbursement comes increased federal scrutiny and oversight. The most notable example is the introduction of Recovery Audit Contractors. These contractors have, over the past few years, increased the quantity of claims being reviewed for accuracy by an outside entity. The increased scrutiny affects the survey and certification process and can lead to deficiency findings and survey tags related to inaccurate documentation.

Having an electronic documentation system allows providers to identify and correct incomplete or inaccurate data. This process increases confidence in the documentation and minimizes exposure for penalties and citations.

While the transition to MDS 3.0 and RUG-IV may represent the greatest challenge since the prospective payment system was implemented, it can be done successfully. Just stay positive, and focus on capturing resident data accurately and in a timely manner by educating employees and leveraging technological advancements. ​

Steve Herron is director of business development for Resource Systems, a company that provides innovative solutions designed to help organizations care for residents. For more information, visit www.resourcesystems.net. DaviD rokeS, rn, is chief operating officer for Post Acute Consulting, a company that helps clients ensure maximized reimbursement by monitoring compliance, containing costs, implementing systems, and providing ongoing education. For more information, visit www.postacute consulting.com.